Objective, impartial advice for Property Investors and Landlords with a focus on the Edinburgh area

Tuesday, 8 November 2016

Why the 3.2% increase in Edinburgh prices?

Edinburgh’s continuing housing shortage is putting the City’s
(and Scotland’s) repute as a nation of homeowners ‘under threat’, as the number
of houses being built continues to be woefully inadequate in meeting the ever
demanding needs of the growing population in the town.

In fact, I was talking to some friends the other day at a
get together and the subject of the Edinburgh property market
came up in the conversation after the weather and politics. It was said that it
used to be that if you went out to work and did the right thing, you would
expect that relatively quickly you would be buying a house, you would go on
holiday every year and you would save for a pension. But now things seem to
have changed.

At least 30,000 new homes are needed each year in
Scotland to tackle the chronic housing shortage this Country has.

As you can see from the graph above (courtesy of the
Office of National Statistics), only 18,285 properties were built in
2015 in Scotland as a whole (split down 12,050 built by private builders, 3,060
built by Housing Associations and a paltry 1,160 council houses). Also, and perhaps more concerning, is the
fact that the last time we build more than 30,000 homes a year was in 1977 (the
year of the punk explosion and the Queen’s silver (yes, silver!) jubilee
depending on your taste) and we have only built 21,000 homes per year on
average over the last 10 years.

The current Scottish Government is helping – they are
committed to see the building of 6,000 homes per year on average and are on
track to deliver this. However, this
still leaves another 24,000 homes per year to build.

The picture in Edinburgh is similar to the Scottish wide
trend.

There are simply not enough houses in Edinburgh and the
shortage of supply has meant Edinburgh property values have
continued to rise, meaning they are 3.2% higher than 12 months ago despite the
Brexit impact on the housing market.

I was taught at school that it is all about supply and
demand, this economics game. The demand for Edinburgh property has
been particular strong for properties in the good areas of the town
and it is my considered opinion that it is likely to continue this year, driven
by growing demand among buyers (both Edinburgh home buyers and Edinburgh
landlords alike). You see, Edinburgh’s economy is quite varied which will help
it weather the current economic uncertainties that we are going through.

…and of supply, well we have spoken about the lack of new
building in the town holding things back, but there is another issue relating
to supply. Of the existing properties already built, the concern is
the number of properties on the market and for sale. The number
of properties currently for sale in Edinburgh is only 2,056,
whilst 12 months ago this figure was well over 2,345 … a massive drop of 12.3%!

With demand for Edinburgh property rising,
minimal new homes being built and less properties coming onto the
market, that can only mean one thing, now is a good time to be a homeowner or
landlord in Edinburgh.

If you would like a chat to find out more about
investment property and property management in Edinburgh please pick up the
phone (0131 603 4570) or email (news@thekeyplace.co.uk).

No comments:

Post a Comment

About This Blog

This blog follows the buy to let market in Edinburgh. You'll find tips, guidance, and analysis that relates specifically to Edinburgh and you'll also find properties from all the estate agents in the city on here that may make decent investments.

Follow by Email

Robert Young

I operate The Key Place and if you're thinking of buying a property to let in Edinburgh, I'll be happy to advise or just offer a second opinion. I can be contacted on news@thekeyplace.co.uk, or 0131 603 4570.